Reserve Bank of Australia(RBA) Lifted the Cash rate target by 50 basis points to 1.35

Reserve Bank of Australia(RBA) Lifted the Cash rate target by 50 basis points to 1.35

The cash rate target was raised by the Reserve Bank of Australia (RBA) today by 50 basis points to 1.35 per cent, as was widely anticipated. This is the RBA’s third consecutive rate increase, and more are likely throughout the year as the government works to rein in inflation. With mortgage and utility expenses continuing to rise, some customers feel the strain.

The RBA increased the cash rate from 0.25% to 0.35% in May and from 0.35% to 0.85% in June. People with variable-rate loans or upcoming fixed-rate mortgage maturities may most feel the effects of today’s decision.

Nearly 40% of Australians are predicted to roll off their cheap fixed rates in the coming year. Please know that we are willing to assist you if you fit into one of these categories. We’ll check that your mortgage rate is still competitive and that it’s the right fit for your needs and ambitions.

Not to get too comfortable, but the RBA has signalled that the cash rate will likely go to 2.5% and potentially more depending on inflation. Please don’t wait to get in contact with us.

Home Guarantee Scheme

Meanwhile, 32 lenders will offer the federal government’s flagship housing support programme for first-home purchasers.

The Home Guarantee Scheme (HGS) now has five participating financial institutions: Credit Union SA, Illawarra Credit Union, IMB Bank, Newcastle Permanent Building Society, and Unity Bank.

There are already 27 lenders, including the Commonwealth Bank and the National Australia Bank, plus a slew of smaller lenders.

The HGS (also known as the First Home Loan Deposit Scheme) requires the following of its applicants:

  • Individuals’ annual income must be less than $125,000, and a couple’s annual income must be less than $200,000.
  • The price cap ranges from $250,000 in regional South Australia to $950,000 in Sydney and varies depending on the property type and location.

Under the HGS, first-time buyers can put down as little as 5% and qualifying single parents as little as 2% on a home. Participants benefit from not having to pay mortgage insurance to their lender because the government guarantees their loan.

Get in touch if you need HGS help.


Are you thinking about entering the market? 

Australia’s total residential property worth has surpassed the $10 trillion thresholds for the first time.

According to the most recent data from the Australian Bureau of Statistics, the total value of dwellings in Australia in the March quarter was $10.2 trillion.

Amazingly, from $5.1 trillion in June 2014, that doubled in value in just seven years.

Even though there have been several instances where prices momentarily decreased, Australian real estate prices have shown an extraordinary increase over the long run.

That’s a factor in why so many Australians desire to be homeowners. It’s also why so many people choose real estate investment to accumulate wealth for retirement.

Are you considering going into business? If so, we can advise you on how much money you can borrow and how to set up your loan correctly. On your behalf, we can also compare lenders and interest rates.

Check your current borrowing capacity here.

Charles Kaluwasha


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